wondering about vacation properties

11 Replies

I was wondering about buying vacation properties for

rental income. Does any one have any insights and advice? Is this kind of property good to have as part of my holding property pacakage.

@Kimberley Riccio - I personaly do not own vacation rentals but there is this podcast all about it. Maybe start there?

http://www.biggerpockets.com/renewsblog/2014/02/13/57-buying-vacation-rental-matt-landau/

Kimberley -

I deal a lot in vacation homes here in central Florida around Disney World. There are approx. 27000 short term rentals here. A lot of them are bad investments, but some are very good ones. So to answer your question . . . Yes, vacation homes can be good additions to your property holdings. The key obviously will be to choose the right ones in the right locations. The vacation homes that are the best investments here are the ones primarily in gated communities, they have the amenities that vacationers want (pool, spa, etc.), and they have 6 or more bedrooms.

Feel free to contact me, and I can give you more detail. A lot of the variables that make a vacation home here a good investment will apply to vacation homes anywhere.

Keith Courtney

I was also curious about vacation rental properties in the Gulfshores, Pensacola, Destin area. From the research that I've already done, I've been told that after HOA fees, insurance, property management and property taxes, it's almost impossible to find anything with positive cash flow in these areas. Does anyone have any insight or a differing opinion? thanks.

Kimberly, personally, from experience and from what I hear form others, they type of vacation properties matter significantly as well. I generally avoid even thinking or looking at condo type vacation properties due to the crazy corruption that goes on in these investments and would recommend focusing on single families or multi families but in which you own the entire building. 

Here is one example a friend of mine who is currently struggling with his vacation rental. He owns a condo unit in a development that is primarily used for vacation rental. In the last 2 years, the property manager setup an acquisition firm to purchase condo units in this project that are being foreclosed on, the property manager channels the incoming vacation rentals into the units owned by his LLC (and or partners). This means that other owners are getting increasingly smaller returns, forcing them to either sell cheap or get foreclosed on, in which his LLC then continues to buy up the rest. It has reached a stage where his LLC owns enough of the development to control the homeowners committee. Sad to say, i think this is going to end badly for my friend.

Vacation rentals can be a great thing, there is a lot of condos in my area, pensacola, destin, panama city, and a lot of people are using them for vacation rentals. With condos tho there are some things out of your control, but it also means you have less maintenance issues to worry about. Every investment has is pros and cons.

I have more experience with single family rentals but being so close to pensacola beach I'm looking to pick up some vacation properties sometime in the future. I dont know if it will be a beach house or condo but either way the the cashfow and equity have to be good.

We have owned a vacation rental on Cape Cod (Falmouth, MA) for the past year and it has been great so far. Through our first 2 prime rental seasons we have been able to earn enough income to cover PITI plus all cost associated with weekend/week rentals. We also use it for occasionally for ourselves so we are able to have free vacations. It is not without some work but overall it has been a good experience and we are planning to buy our 2nd vacation rental within the next year.

Most answers will be coming from a personal experience but without being biased they can be great if you have them in the right locations.

Properties surrounding Amusement parks, national parks and beaches are all great.

We hold a couple properties in ski resorts and those are rented all year long even with the insurance, HOA fees and property management fees being a little on the steep side.

Its all about location just like anything else within the real estate industry.

Regards,

Andres Calderon

I am looking property in gulf shores, al.

Can anyone help?

I am in Alabama...mostly in the southern part, What are you looking for in Gulf Shores?  I am working on a deal in Selma, Alabama too...if you are interested or know someone who might be interested in Selma, Alabama.

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